Saturday, August 26, 2017

Michael Boskin’s Revisionist Economic History

So far, Trump has failed to deliver any major legislative policy achievements. Nonetheless, he has helped the economy by rolling back President Barack Obama’s damaging regulatory and administrative diktats in areas such as energy, education, finance, and labor law.

He offers no evidence for this spin – just a lot of babble regarding Trump tweets or whatever. But what caught my attention as well as that of Brad DeLong with this intellectual garbage:

Bill Clinton’s administration began with a lack of discipline, a failed attempt at health-care reform, and a loss for the Democrats in the 1994 midterm elections. But Clinton turned things around, appointing new aides, moving toward the political center, winning reelection in 1996, and working with a Republican-controlled Congress to balance the budget and reform welfare.

Brad does a nice job of debunking this nonsense but let me just add that the Republican controlled Congress was not what balanced the budget. What balanced the budget was the 1993 tax increase they voted against, the economic boom they claimed would not happen, and the peace dividend that the GOP hawks abhorred. Boskin next sings the praises of St. Reagan:

Similarly, Ronald Reagan endured large Republican losses in the 1982 midterm election. At that time, the US was in a deep recession, owing to the Federal Reserve’s tough disinflation policy, which Reagan had supported. But the economy made a strong recovery, helped by Reagan’s tax cuts and increased military spending.

At least Boskin did not try to pin the 1982 recession on Jimmy Carter but how can he endorse Reagan’s fiscal irresponsibility while trying to tag Clinton as allegedly having a lack of fiscal discipline. After all, the Reagan fiscal stimulus dramatically increased real interest rates which not only hurt private investment but also led to a massive appreciation of the dollar leading to a sharp fall in net exports. Maybe this fluff does not belong on the pages of the National Review as it may have been too dishonest even for those Republican hacks.

Well, Boskin is a very partisan observer, having served as a CEA Chair for W. Bush. I disagree that the various regulatory changes Trump has made will do all that much for economic growth, but in fact he has engaged in a lot of regulatory changes, most of them deregulations, especially in the area of the environment. Those who keep running around ranting about how Trump has not achieved any of his agenda are way off. He has achieved a lot of it through his executive orders, just not that much through legislative action.